Enough Already About The Salary Wars

All the buzz this week seems to be about top grossing/top ranked law firms matching each other — and besting one another — in starting salaries for associates and in associate bonuses.  It is all about what Cravath is doing, what Milbank is doing …. and the beat goes on.  Frankly, I am tired of reading about it because it affects so relatively few.

Statistical Research Department has reported that approximately 35,000 law students graduated across the US in 2022.  I think we can assume that approximately the same number graduated in 2023, although that number was not readily apparent from my research.

That is a lot of new law school graduates, and more than 50% of them typically start practice at law firms.  So, let’s say that 17,500 new law graduates are practicing in law firms as I write.  That is still a lot of new associates.

And let’s also say that the top 50 law firms with annual revenues between $6 billion and $1.2 billion are fighting over the top graduates of the most highly ranked law schools in the country.  I guess that, with those annual revenues, they can afford to raise starting salaries to $225,000 — which is exactly what the top firms are doing —- and more if you add the increase in yearly bonuses.

It is obvious from these numbers that there are plenty of top law school performers to go around and service these top law firms.  However, as noted in my blog last week, the important question is whether the law firm managers and executive committee members of those firms understand the consequences of that kind of salary increase in terms of the high price that associates will pay.  Law firms do not give out that kind of money without exacting demands like more billable hours — which, when added to the current billable hour requirements, will likely result in more associates on shrink’s couches demonstrating signs of depression and career choice remorse.   Your guess is as good as mine about how that will affect future recruiting.

And also consider the stress that it puts on second tier law firms trying to compete.
One legal industry expert was quoted on Above The Law today as stating that, while elite firms with high profits will be able to match these compensation increases, others will have a very difficult time doing so.  That is easy to believe when you consider that the following factors — inflation, recession, war, and interest rate hikes —conspired to create a difficult business environment in 2022, and that the profession has not bounced back yet.  Work at the associate level is still down, and it likely will be for awhile.

So, I say enough already.  Let’s hear about something else.  For example, let’s hear about law firm reforms to meet the circumstances of today rather than more about money.  There are a lot of issues to address that affect young lawyers —- even those who do not meet the criteria for these huge salary hikes.  Most of them are very capable with promising futures, and they deserve information that is relevant to them and, like me, they probably are tired of reading about issues affecting only the elite.



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Thought For The Week: “Success is not final; failure is not fatal: It is the courage to continue that counts.” Winston Churchill

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Finally, Milbank’s Foul Ball is Called

Salary increases for associates are a competitive sport.  One top law firm moves, and others follow.  Just like lemmings to the sea.

Finally, the foul ball is called, but anonymously.  Nobody wants to own it.  But, at least it is out there, and attention should be paid.  Salary increases have repercussions, and associate lawyers in BigLaw do not need more  pressure on them just to satisfy egos that feast on being the biggest and the best.

Here is the comment, as reported by Above the Law recently.

 All we’re doing is continuing to put targets on these kids’ backs. Increasing salaries…causes them to increase salaries up the chain [and] increase billable hours for them. I just think they’re taking this pound of flesh out of them.”

Yes, top management needs to pay attention to what they are doing and how their actions impact the most vulnerable.



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Thought For The Week: “The historian is a prophet facing backwards.” Friedrich von Schlegel

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Calling All Senior Associates!

In a surprising development in law firm world, senior associates are suddenly in high demand — a real change from even a year ago.  We all recognize that associates become more valuable as they gain experience and climb law firm ladders, but this is something different.  Now senior associates are especially sought after outside their firms as laterals, according to an article in the American Lawyer earlier this week.

Being the subject of lateral hiring changes the game for associates.  It puts experienced associates at the heart of the bargaining process like never before.  An associate recruiter at Major, Lindsey & Africa, as quoted in the American Lawyer and reported by Above the Law, attributes this market shift to the the lack of training for associates during the pandemic, which has created a need at firms for associates with transferable skills.  Firms are desperate for senior associates who can run a deal or a case without much supervision.  And it seems that associates with 6 years or more experience are taking advantage of that opportunity.

Here’s the Above the Law article.  Check it out and share with your friends.  Some of you may want to dust off your resumes and test the lateral market.

It is so nice to be wanted!

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Thought For The Week: “Neither love nor terror makes one blind: Indifference makes one blind.” James Baldwin

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BigLaw Needs to Ante Up

I am sure that I join most of you — all of you, I hope — in the pain and distress I feel about the Israeli-Hammas Conflict.  Too many innocent people are being killed, maimed and left homeless on both sides, resulting in a shared responsibility that is fueling continued conflict.  And the reactions in our country, where people are taking sides in the most heinous ways, makes me sad and yearning for the democracy I once knew when people acted responsibly and demonstrated true moral commitments and compasses.

Some of this heinous behavior has been initiated on law school campuses and is growing day by day.  There should be no place on the grounds of institutions of higher learning, especially those teaching the rule of law, for this irresponsible behavior underscored by hatred, and the situation cries out for leaders to step forward to combat it.

According to this article, BigLaw seems to think that responsibility lies with the administrations of law schools, specifically law school deans.  See the article for a description of the letter, including excerpts, signed by 24 major law firms.

Although I understand that law schools, specifically those called out in the suggested response by law school deans, have not handled issues of antisemitic behaviors and other hate-related incidents well in the past, the suggestion that it is law school deans who must take the lion’s share of the responsibility to curb the current despicable behavior, makes me cringe.

I barely remember ever meeting my law school dean when I was in law school.  Surely, I never had a really meaningful conversation with him.  And I expect that is true of many law students today.  Once an applicant is accepted into law school, what the administration thinks is not terribly impactful or persuasive to them any more.  It does not hold sway with students —– certainly not the way that future employers hold sway with them.  And that is precisely why the “pass the buck” attitude by the signatories to this letter is so absurd.

Law firms hold the sway.  They control access to the future that so many of the graduates of elite law schools want, and they could make the same kinds of powerful statements of intention that Winston and Davis Polk did when it rescinded an offer to a law student who had participated in the kind of hate speech being demonstrated at campuses today.

I am not naive.  The example of Winston and Davis Polk, discussed in the article, caused the kind of push back in the world of large law firms that gives managing partners and management committee members heartburn as they consider the possible negative impact on clients and profits.  Profits over responsible and moral behavior — that about says it all.  And the same kind of “group think” is also possible when it comes to losing out on the talent ostensibly represented by the “best” recruits from elite law schools.  Again, it is all related to profits and greed.

So, I say again, as I have so many times in my books and articles and as a part of the nearly 100 presentations I have made at law schools, law firms and law organizations throughout the country to date: BigLaw needs to choose responsibility over greed.

Simply put: BigLaw needs to ante up!  And now is the time.




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